Many traders struggle with this: they capture the signal for a trend reversal but miss out on the subsequent big moves by exiting too early. In fact, the trend continuation patterns of the Bollinger Bands are the core tools that help everyone 'hold onto profits'. They clearly inform traders that 'the trend is still ongoing, there's no need to rush to exit', maximizing profits. This article will break down the characteristics, judgment methods, and practical skills of trend continuation patterns.
The core feature of the Bollinger Bands trend continuation pattern is 'prices stick to the track', specifically manifested as: in an upward trend, the K-line continuously moves close to the upper band, and even if there is a brief pullback, it does not break below the middle band, with the channel always maintaining an expanding state; in a downward trend, the K-line continuously moves close to the lower band, and the pullback does not rise above the middle band, with the channel similarly maintaining expansion.
In addition to the relationship between price and the track, there are two auxiliary judgment signals: first, the retracement is small; during the trend continuation phase, the pullback is often shallow and fast, without deep retracement, indicating that the momentum of the original trend is sufficient; second, indicator dullness, at this time observing indicators like RSI and KD, you will find that they stay in the overbought (uptrend) or oversold (downtrend) area for a long time. This is not a reversal signal, but a reflection of a strong trend.
In practice, the response strategy for trend continuation patterns is very simple: as long as the price continues to stick to the track, the channel remains expanding, and there is no break below/above the middle track, you can continue to hold positions without frequent operations. Stop-loss can be set outside the middle track; once the price effectively breaks below/above the middle track, then consider exiting. This way, you can capture most of the trend profit and also stop-loss in time when the trend reverses.
The misconception to avoid is: mistaking 'indicator dullness' for a 'reversal signal.' In the phase of strong trend continuation, indicator dullness is a normal phenomenon, and blindly operating against the trend can easily lead to trend stop-loss.
